NELCO.NS WACC - Weighted Average Cost of Capital

The WACC of Nelco Ltd (NELCO.NS) is 14.1%.

The Cost of Equity of Nelco Ltd (NELCO.NS) is 14.25%.

The Cost of Debt of Nelco Ltd (NELCO.NS) is 9.10%.

	Range	Selected
Cost of equity	12.50% - 16.00%	14.25%
Tax rate	29.30% - 30.10%	29.70%
Cost of debt	9.10% - 9.10%	9.10%
WACC	12.3% - 15.8%	14.1%

WACC

NELCO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.00%

Tax rate	29.30%	30.10%
Debt/Equity ratio	0.03	0.03
Cost of debt	9.10%	9.10%

After-tax WACC	12.3%	15.8%


Selected WACC	14.1%

NELCO.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for NELCO.NS:

cost_of_equity (14.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.